For most of the day, stocks moved in a narrow range, but volume and prices picked up late in the day.
Two companies successfully priced bond deals late in the day:
1) JP Morgan, on the heels of its successful morning earnings report, priced $3 billion in 10 year notes at 350 basis points over Treasuries, in line with expectations.
2) Seagate priced $410 million in 5 year bonds.
Earlier in the day, regional banking giant Regions Financialsurprised the Street by pre-announcing that they would be profitable for the quarter, a loss of $0.42 was expected.
Regional banks are expected to struggle, because they do not have investment banking operations that can be used to boost reserves for losses in real estate or credit cards. Regions comment indicates that gains from mortgage refinancings, as well as possible accounting changes, may be more prominent than thought.
Also late in the day, the WSJ reported that the Fed was considering changing the Term Asset-backed Securities Loan Facility (TALF) to allow for the inclusion of commercial real estate. The TALF offers 3-year loans to investors who use the loans to buy asset backed securities like car loans and credit card receivables.
Expanding the TALF to commercial real estate would be a plus for for banks, insurers and REITS, all of which moved up late in the day.
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